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Nonprofit Basics: Navigating the Complex Rules That Describe A Public Charity

June 28, 2022 Podcast
EO Radio Show

Welcome to EO Radio Show. This nonprofit basics episode is intended to help a founder of a new charity to navigate the complex rules that describe a public charity.  Many people think that the designation 501(c)(3) means an organization is a charity, but there is more to it than that.

In this episode, we'll talk about the IRS classifications that distinguish between a public charity and a private foundation. We’ll talk about the four basic paths to public charity status and try to dispel some of the mysteries surrounding what it means to be recognized by the Internal Revenue Service as a public charity. Then, we’ll close with some tips for a new organization that intends to qualify for public charity status based on fundraising from the public or, alternatively, primarily from generating income from their exempt function.

Resources:

Exempt Organization Types: https://www.irs.gov/charities-non-profits/exempt-organization-types

Schedule A, Public Charity Tests: https://www.irs.gov/pub/irs-pdf/f990sa.pdf

Instructions to Schedule A: https://www.irs.gov/pub/irs-pdf/i990sa.pdf

The Wonderful World of Foundation Classification:
https://www.stayexempt.irs.gov/home/depth-topics/wonderful-world-foundation-classification and

https://www.stayexempt.irs.gov/se/files/downloads/FoundationClassification_Print.pdf

Internal Revenue Code Sections:
https://www.law.cornell.edu/uscode/text/26/509

https://www.law.cornell.edu/uscode/text/26/170

If you have suggestions for topics you would like us to discuss, please email us at [email protected]

Additional episodes can be found at EORadioShowByFarella.com

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